New rules delayed and consultation reopened

The chancellor allayed fears yesterday that more than 300,000 small businesses could be hit by new rules on so-called "income shifting", by delaying its introduction for at least one year and reopening consultation. Income shifting is where couples who jointly own a firm divide the dividends between them to minimise their tax liabilities. The practice has been in the government's sights since last July, when it lost the landmark Arctic Systems case, in which IT consultants Geoff and Diana Jones saw off a demand by Revenue & Customs for more than £40,000 in back-taxes.